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isting liabilities, but also as to the use of the proceeds of the sales of the residue of the bonds. Had the Company become bankrupt, no part of the bonds or their proceeds would have formed part of the general assets.

Parker v. Muggridge, 2 Story, 345.

An agreement between mortgagor and mortgagee, that a sum advanced by the latter shall, with a view to create or make better the security of the mortgagee, be held and applied by the mortgagor, under the supervision of the mortgagee, to augment the value of the mortgage estate, makes, as between the parties, the fund a trust fund. Any diversion of it would be a violation of trust, and be restrained by a court of equity. The word "trust," is wholly unimportant. Any terms that create a fiduciary relation are enough.

Pennock v. Coe, 23 How., 129, 16 L. ed. 441; King v. Denison, 1 Ves. & B., 273; Legard v. Hodges, 1 Ves., Jr., 477; Bagshaw v. Eastern U. R. R., 2 Macn. & G., 394.

Next, as to the legal construction of the article itself, or the clause in the mortgage on which the controversy arises.

1. As we have shown, there is nothing in the surrounding circumstances, nothing in the terms, recital or scheme of the mortgage itself, which tends to the conclusion that the language of article 6 was inadequately used, nor that when it declares that the written assent of the trustees "Shall be necessary to all contracts made by the party of the first part, before the same shall be a charge upon any of the sums received from the said sale," it was never designed that such contracts should, in any event whatever, be made so as to be made a charge upon the sums thus received.

2. If, then, there be nothing in the surrounding circumstances, nor in any other part of the mortgage to lead to the necessary belief that the words used ought not to be held to express the true intent of the parties, then we submit that the words, upon settled principles, must receive their natural force and meaning, and that the construction must be such that every word used by the parties shall be made effective nothing rejected, nothing added-unless, on its face, any of the language used is repugnant to some other part.

If we are right in this, then it is too clear for controversy, that the article contemplates a "charge" in favor of some person "upon the sums received," whensoever contracts of the description referred to shall be made and approved in writing by the trustees.

3. The next inquiry is: who are the person or persons in whose favor that charge upon the conditions prescribed was to arise?

It will not be suggested that the language, rightly construed, imports the creation of a charge in favor of the Corporation itself.

The Corporation already, from the start, held the fund in its own hands in trust for the same purpose, with the right and duty so to apply it. The formality to create a charge upon it in favor of the Company as fast as it executed contracts, to carry into effect their already prescribed trust duties, would be idle and superfluous.

We submit, that the character of the charge to be created, points conclusively to the parties for whose benefit it is created. That charge is to be of the "contract made;" not merely of

the fixed periodical payment to be made under it. It may involve all other incidental pecuniary claims so commonly arising in the course of carrying out such a work.

None but the contractor would have any interest in having the contract itself made a charge upon the fund.

And if the contract, when designated by the signature of the trustees, is to be a charge upon the fund in favor of anyone, it is difficult to see how a court of equity can deny to the contractor, who alone is to receive the fund appropriated, the right to enforce that charge.

The provisions of the indenture, coupled with the written approval of the contract in pursuance of them, give to the trust relied upon that certainty of subject and of object which is necessary to its enforcement, and which of itself is deemed the ground for inferring the existence of a trust from words doubtful in themselves. Paul v. Compton, 8 Ves., 380; Morice v. Durham, 10 Ves., 536.

We admit the full force of the recitals showing that the primary purpose was to secure the bonds by completing the road, and that the trustees were charged with the duty of carrying out this purpose; that the required assent of the trustees to executory contracts was for the purpose that they should control the expenditure of the fund, so as to add to the security of the bond holders. But it is not perceived how all this is inconsistent with the auxiliary purpose that the trustees might assent that proper contracts for construction, when approved by them, should be a charge upon the fund thus exclusively devoted to and held in trust for the very purpose of paying the contractors. Nor does the recital, that the bonds should be the first and only lien on the property and franchises of the Company, seem to be weighty in support of defendant's construction. It obviously refers to the completion of the road, and is in no way repugnant to the provision that the contractors should, with the assent of the trustees, have a lien, not upon the property and franchises of the Company, but on a trust fund devoted to securing the completion of the road.

See U. S. v. New Orleans R. Co., 12 Wall., 364, 20 L. ed., 435.

The suggestion that the mortgage does not contemplate that either the trustees or bond holders should see that the assets were marshaled, so that they should be applied to the discharge of contracts in the order of their priority, does not seem to plaintiff to be of grave importance in settling the construction of the clause in controversy. No express provision on this subject was to be looked for. The duty of administering the fund so as to preserve all just priorities, rested primarily on the Company, who was trustee and administrator of that fund, subject to the provision of the mortgage trustees; a duty which resulted from its position and which it was not requisite to set out and declare.

If defendants' assertion that there is nowhere manifested in the indenture an intent to secure contractors, means to except the clause in controversy, it is correct; if not, then it merely begs the question. That there is nothing repug nant to such intent throughout the indenture, we have shown.

the facts and circumstances specifically set forth are such as to sustain the allegation. They are mere color put upon the circumstances by the pleader.

But the substantial reliance of the defense seems to be upon the proposition that, giving to the words of the clause their plain and ordinary significance and conceding that they do relate to a charge or lien to be given to contract- Nesbitt v. Berridge, 8 L. T. (N. S.) 76; Grenors, yet the clause does not, of itself, create such ville Murray v. Clarendon, L. R., 9 Eq., 11; charge, but merely authorizes its creation; and | Hayman v. Governors of Rugby School, L. R. that to create the same, something more is nec- 18 Eq., 28; 1 Dan. Ch. Pr. (4th Am. ed.), 544, essary than that a contract to complete the road Story, Eq. Pl., § 37, a, § 254, b, § 249, a; Morris should be assented to in writing by the trustees. v. Morgan, 10 Sim., 341; Ellis v. Colman, 25 To this we answer, that there is nothing on Beav., 662; Evan v. Avon, 6 Jur. N. S., 1361. the face of the clause which provides that only No charge was created in favor of the plaincontracts which contain a provision to that ef- tiff on the money proceeds of the sale of the fect shall be secured by such lien; and that con- mortgage bonds. tracts, to be secured, must contain provisions for working out the lien. It merely declares that, to all contracts, before the same shall be a charge, the written assent of the trustees shall be necessary. Unless, therefore, it be a necessary legal result or implication that only contracts expressly providing for such lien can be embraced by the clause, the objection must fail.

We submit that the agreement that plaintiff's contract should be thus secured, need not even be evidenced by any writing in or outside of the contract. And further, that the facts disclosed (aside from the admission of the demurrer) establish in writing and beyond all reasonable doubt that it was agreed that it should be thus secured.

It is admitted that, under the mortgage, the fund was, by contract between the Company and the mortgagees, set apart to be by the Company applied exclusively to the completion of the road; and it is further admitted that by a clause in that mortgage, this fund might, with the written assent of the trustees, be subject to a charge in favor of contractors.

When, therefore, it is shown that after the execution of plaintiff's contract, and in exact and literal compliance with the conditions required by the mortgage to subject the fund to such charge, the trustees have, by a written indorsement, approved and assented to plaintiff's contract; and when it is seen that the procuring such written approval would be otherwise purposeless on the part of the plaintiff, and an idle ceremony on the part of the trustees, it would seem not to be open to controversy that those proceedings were, and were intended, to constitute and perfect an agreement by all parties that the contract in question should be a charge upon the fund.

Stevenson v. Austin, 3 Met., 474.

If a fund be set apart, out of which debts are to be paid, it amounts to a contract with those who become creditors on the faith of it, that the fund shall not be withdrawn by those who set it apart, to the injury of such creditors.

Curran v. Arkansas, 15 How., 304; Eastman v. Foster, 8 Met., 19; Rice v. Dewey, 13 Gray, 49: New Bedford Bank v. Fair Haven Bank, 9 Allen, 178; Curtis v. Tyler, 9 Paige, 432; Moses v. Murgatroyd, 1 Johns. Ch., 127; Hawthorne V. Calef, 2 Wall., 20, 17 L. ed., 778.

Messrs. C. S. Bradley and William G. Russell, for defendants in error:

Mere averments of purpose, object, intent and understanding, reliance on the part of the complainant, and knowledge on the part of the defendants, like general allegations of fraud or of trust, are not admitted by demurrer, unless

The word "charge" is not used in the strict and technical sense. This appears from the whole scope of the mortgage indenture.

The clause is in form one of a series of covenants on the part of the Corporation; and is in fact an agreement that it will expend its funds with the written approval of one of the three trustees.

There is nowhere, manifested in these cove nants nor in any part of the indenture, any intent to secure contractors or parties dealing with the Corporation. Its purpose is declared in expressed terms to be "For the better securing and more sure payment of the sums of money mentioned in said mortage bonds, and each of them according to the tenor thereof."

The complainant is not a party to the indenture, and is not entitled to claim any benefit under its provisions.

Low v. Bagwell, 4 Dru. & War., 398; Ravenshaw v. Hollier, 7 Sim., 3; Gibbs v. Glamis, 11 Sim., 584; Colyear v. Mulgrave, 2 Keen, 81.

Where a party creates a trust for the payment of debts, the creditors, not being parties thereto, do not thereby become cestuis que trust, or invested with any power to call upon the court to execute the trust.

Burr. Assignments, 2d ed., 578; Ellison v. Ellison, 6 Ves., 656; 1 Lead. Cas. Eq., 199, and cases cited.

But, assuming plaintiff's construction of the word "charge" to be correct, and also assuming that under some circumstances the plaintiff might claim under the indenture of mortgage; yet, the construction which the plaintiff attempts to derive by implication from the clause in question, is forced and erroneous. Giving to the language of the clause its plain and ordinary signification, it does not dispense with any of the ordinary conditions for the creation of a lien or charge on moneys in the hands of a corporation; but, on the contrary, prescribes one additional and extraordinary condition and prerequisite, viz.: the consent of one of the trustees to the contract, in favor of which a charge is to be created. The first essential condition for binding funds by a charge is, that the parties to the contract should agree to that effect; and a second and almost equally essential condition, where, in this case, the debtor is to retain the funds in his own custody, is to provide some means and instrumentality for enforcing the creditor's rights over them.

But here the contracting parties, the plaintiff and the Corporation, with their written contract before the court, have entered into no stipulation for a charge, and have set forth no method for enforcing one.

But mere authority to create a lien or charge,

430-440

SUPREME COURT OF THE UNITED STATES.

whether conferred by statute or agreement, does not, ipso facto, create such lien or charge. Cincinnati v. Morgan, 3 Wall., 275, 18 L. ed. 146. In the present case the owners of the property, who are claimed to have made the appropriation, must be either the bond holders or the Corporation.

(a) If the bond holders, it is impossible to infer from the indenture any intent on their part to apply the money paid by them to the Corporation for their bonds, to any other purpose than the improvement of the railroad which was their security. There is no allegation that it has been otherwise applied.

(b) If, on the other hand, the Corporation, as owner of the property, to wit: the proceeds of the bonds to be sold, is alleged to have appropriated them in advance to the plaintiff's claim, we say, as before, that the only intention to appropriate that fund to be discovered in the indenture, is an intention to apply it to increase the mortgage security; and, second, even an express agreement to pay the plaintiff out of that specific fund when received, would create no lien in his favor, unless accompanied by some act of appropriation by which the Corporation parted with its control of the fund.

Bradley's case, Ridg, t. Hard., 194; Christmas v. Russell, 14 Wall., 69, 20 L. ed., 762; Hall v. Jackson, 20 Pick., 194; Dickenson v. Phillips, 1 Barb., 454; Rogers v. Hosack, 18 Wend., 319; Malcolm v. Scott, 3 Hare, 39: Vaughan v. Halliday, L. R., 9 Ch., 561; 2 Rose, 357.

Mr. Justice Field delivered the opinion of

the court:

The Boston, Hartford and Erie Railroad Company, a Corporation existing under the laws of Massachusetts, Rhode Island, Connecticut and New York, and authorized to construct and maintain a railway between certain designated points in those States, on the 19th of March, 1866, by its indenture of mortgage of that date conveyed to Burdell and others all its railways, rights, privileges and franchises, and all its property then owned or thereafter to be ac quired, to be held by them and their successors in trust upon the terms and for the purposes set forth in this indenture. This mortgage was authorized and ratified by the laws of the several States mentioned. A copy of the instrument is annexed to the bill. The object of its execution was to secure certain bonds of the Company in sums of $1,000 each, to the amount of 431*] $20,000,000, to be thereafter *issued and disposed of to raise the funds required to provide for and retire all the then existing mortgage debts and prior liens upon the line of its road, and to complete and equip the road and to lay down a third rail thereon. The road was then only partially constructed, and in its existing state was of less value than the amount of the bonds proposed to be issued. The Company, however, expected that upon its completion the road would be of great value and afford ample security for the bonds.

To induce parties to purchase the bonds under these circumstances, it was essential to give them satisfactory assurances that the moneys received should be honestly applied to the purposes declared. The indenture, therefore, which was drawn with great skill and care, contained

several covenants on the part of the Company,
intended to inspire confidence in such applica-
tion and create safeguards against the misuse
of the moneys. Among others were these: 1.
That of the bonds issued there should be re-
tained in the hands of the trustees such portion
as would be equal to the whole amount of the
bonds and mortgage notes outstanding from
time to time, as a lien upon any of the property
or franchises conveyed, to be delivered to the
Company only on the cancellation of a corre-
That the expenditure
sponding amount of such outstanding bonds or
mortgage notes; and, 2.
of all sums of money realized from the sale of
the bonds should be made with the approval of
at least one of the trustees, and that his assent
in writing should be necessary to all contracts
made by the Company before the same should
be a charge upon any of the sums received from
such sales.

In October, 1867, the plaintiff entered into a contract with the Corporation for the construction of a portion of its road at certain specified rates of compensation, the work to be commenced on the first of December, 1867, and completed on the first of June, 1869; payments to be made monthly at 90 per cent. of the work done, as estimated by the engineer of the Company, the remaining 10 per cent. to be retained until the final completion of the work. This contract was approved and assented to in writing by two of the trustees under the mortgage. A copy of the contract is annexed to the bill.

Under this contract the plaintiff performed a large amount of work, all of which was accepted by the engineer of the Company in charge, but for only a portion was the plaintiff paid. There is now due to him for this work over $1,000,000, with interest from the first of January, 1870.

A large amount of money was received by the Company from sales of the bonds issued, more than sufficient to pay the amount due the plaintiff; but instead of being thus appropriated, it was expended in acquiring new property to be held under the mortgage, and in improving and increasing the value of the property then and since in the possession of the trustees.

Subsequently, on the petition of a creditor, the Company was adjudged bankrupt by the District Court of the United States for the District of Massachusetts, and in March, 1871, its property and effects, except so far as held by the trustees under the mortgage indenture, passed to assignees appointed in the proceedings in bankruptcy.

In August, 1871, new trustees under the mortgage, as successors of the original trustees, took possession of the mortgaged premises and now hold the same for foreclosure.

The Corporation was insolvent at the time the debt to the plaintiff became due, and had no funds or property from which that debt could be satisfied, except such as was then claimed under the mortgage, and is now held by the trustees or assignees.

The plaintiff, therefore, brought the present suit against the new *trustees under the [*437 mortgage, and the assignees in bankruptcy, to charge the property held by them under his done for work with the amount of his demand remainwith the Company. ing unpaid contract

In sup88 U. S.

*

strument was executed to secure the payment
of the mortgage bonds; it so declares on its
face. It nowhere indicates any design to secure
the contractors; its language is, "that for the
better securing and more sure payment of the
sums of money mentioned in the said mortgage
bonds, and each of them," the indenture is
executed. And the clause in question was in-
tended to increase this security by preventing
a wasteful expenditure of the funds of the Cor-
poration; it is, in fact, an agreement on its part
that the funds received from the bonds shall
only be used with the approval of one of the
trustees, and without his written assent no con-
tracts shall be payable out of those funds. The
term "charge" is not used in any technical
sense, as importing a lien upon the [*439
funds, but in the general acceptation of a claim
that may be payable out of them. The con-
tractors are not parties to the indenture, and
are not entitled to claim as against those par-
ties any benefit under its provisions, except
that upon the assent being given to their con-
tracts the use of the moneys for their payment
is permissible. They are, so far as the agite-
ment is concerned, strangers to the instrument.
The written assent to contracts on the part
of one of the trustees was not required for their
protection, but as an additional safeguard to
the bond holders against an improvident use of
the funds by the corporation. The clause is one
of a series of covenants on the part of the Cor-
poration with the trustees, intended to secure
the application of the funds received to the pur-
poses contemplated at the time the indenture
was executed-the retirement of the existing in-
debtedness of the Corporation, the completion
of its road, and the laying of a third rail. The
full effect is given to the language of the clause
in question by this interpretation.

port of his pretension he insists that under the
indenture his contract, when it obtained the
assent of two of the trustees, became a charge
upon the moneys received by the Corporation
from the sale of the bonds; that the trustees
under the mortgage and the Corporation there-
upon became trustees for his benefit of the pro-
ceeds thus received, and were bound to apply
them to pay his debt; that by their failure to
have the proceeds thus applied, and by expend-
ing them in acquiring new property and im-
proving that already possessed, the charge upon
the proceeds became attached to the property
in the hands of the trustees thus added to and
improved; and that this charge is entitled to
preference over the lien of the bond holders.
The positions thus asserted must find their
support, if at all, in the provisions of the in-
denture of mortgage. If not sustained there
they are not sustained anywhere. The aver-
ments of the bill as to the purport and meaning
of the provisions of the indenture, the object
of their insertion in the instrument, and the
obligations they imposed upon the Corporation
and the trustees, and the rights they conferred
upon the plaintiff when his contract was ap-
proved, are not admitted by the demurrer.
These are matters of legal inference, conclusions
of law upon the construction of the indenture,
and are open to contention, a copy of the in-
strument itself being annexed to the bill and,
therefore, before the court for inspection. A
demurrer only admits facts well pleaded; it
does not admit matters of inference and argu-
ment however clearly stated; it does not admit,
for example, the accuracy of an alleged con-
struction of an instrument, when the instru-
ment itself is set forth in the bill, or a copy is
annexed, against a construction required by its
terms; nor the correctness of the ascription of
a purpose to the parties when not justified by
The present case, notwithstanding the large-
the language used. The several averments of ness of the plaintiff's demand, is not different
the plaintiff in the bill as to his understanding in its essential features from those cases of
438*] of his rights, and of the liabilities and daily occurrence, where the expectation of a con-
duties of others under the contract, can, there-tractor, that funds of his employer derived from
fore, exert no influence upon the mind of the specific sources will be devoted to the payment
court in the disposition of the demurrer. This of his services or materials, is disappointed.
is not the case of a bill to set aside or reform Such expectation, however reasonable, founded
the contract as not expressing the actual inten- [ even upon the express promise of the employer
tion of the parties. It is a case where the con- that the funds shall be thus devoted, of itself
tention arises solely upon the meaning of the avails nothing in favor of the contractor. Be-
indenture in its bearing upon the contract, and fore there can arise any lien on the funds of
that must be ascertained by applying to its the employer, there must be, in addition to such
language the ordinary rules of interpretation. express promise, upon which the contractor re-
Lea v. Robeson, 12 Gray, 280.
lies, some act of appropriation on the part of
the employer depriving himself of the control of
the funds, and conferring upon the contractor
the right to have them applied to his payment
when the services are rendered or the materials
are furnished. There must be a relinquishment,
by the employer, of the right of dominion over
the funds, so that without his aid or consent
the contractor can enforce their application to
his payment when his contract is completed.
received. It is contended that the term
"charge," as here used, is synonymous with Rogers v. Hosack, 18 Wend., 319; Dickinson v.
the term "lien," and that the whole clause Phillips, 1 Barb., 454; Hoyt v. Story, 3 Barb.,
262; Hall v. Jackson, 20 Pick., 197; Christmas
implies that when a contract has thus re-
ceived the written assent of one of the trustees, V. Griswold, 8 Ohio St., 558; Christmas v. Rus-
it shall be, to the extent of the obligation sell, 14 Wall., 70, 20 L. ed., 762; Malcolm
*In the case at [*440
created, a specific lien upon the moneys V. Scott, 3 Hare, 46.

Looking, then, at the indenture, we find that the only clause upon which the plaintiff relies to sustain his positions, is the one providing that the expenditure of all sums of money received from the sale of the bonds shall be made with the approval of at least one of the trustees, and that his assent shall be necessary to all contracts made by the Corporation "before the same shall be a charge upon any of the sums" thus

obtained. But this meaning of the term is bar there is no circumstance impairing the
not in harmony with its immediate context dominion of the Corporation over the funds
bonds;
the object of the indenture.
21 WALL

or

The in- received

from the

there is only
677

ANN

SUPREME COURT OF THE UNITED STATES.

OCT. TERM,

beyond the power of the State to impose. The
to another. The latter is an interference with and
former is not.
a regulation of commerce between the States and

and other highways and to impose tolls, fares or
freights for transportation thereon, is unlimited
3. The power of a State to construct railroads
and uncontrolled.
thus derived is subject to its own discretion. But
persons or property from one State to another.
The disposition of the revenues
a State cannot impose a tax on the movement of

its covenant with the trustees that the expendi- | transportation of goods or persons from one State ture of those funds shall be made with the approval of one of them, and that one of them shall give his written assent to its contractors before they are paid out of such funds. There is no covenant with the contractor of any kind in the instrument, and no right is conferred upon him to interfere in any disposition which the Corporation may see fit to make of its moneys. The essential elements are wanting in the transaction between him and the Corporation to give him any lien upon its funds. No right, therefore, exists in him to pursue such funds into other property upon which they have been expended. The case, as already in timated, is, on his part, one of simple disappointed expectation, against which misfortune, equity furnishes no relief.

The plaintiff made his contract with knowledge of the existing mortgage and of the declaration which it contains, that it is to be the "first and only lien on the property and franchises of the Company," and that it covered not only property then held by the Company, but would also cover all property which might thereafter be acquired. If he had reason to doubt the future solvency of the Corporation, or that it would apply the funds it obtained from its bonds to the payment of his work, he should have provided against such a contingency in advance. He cannot now be heard to complain that his expectation of receiving for his work funds not specifically appropriated for his benefit has failed, and to insist that, therefore, he ought to be allowed to follow those funds into property upon which other parties should have by the terms of a previous contract the first and only lien. Decree affirmed.

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Stipulation in railroad charter for bonus, when constitutional-power of State over railroads -cases followed-burdensome rates of transportation-special charter--constitutional question—jurisdiction.

5. Relief from onerous and burdensome rates of

42, 18 L. ed. 746, and Freight Tax Cases, 15 Wall., 4. The cases of Crandall v. Nevada, 6 Wall., 232, 21 L. ed. 146, cited and re-affirmed. transportation imposed under state authority, must be sought in the competition of different lines, and roads and facilitate military and commercial intercourse between the different parts of the country. perhaps in the power of Congress to establish postroad Company for constructing and operating the 6. The charter of the Baltimore and Ohio Raflton, contained a stipulation that the Company, at branch Railroad between Baltimore and Washing-. the end of every six months, should pay to the State one fifth of the whole amount received for the transportation of passengers. held: was accepted and complied with for many years; This charter

the Constitution of the United States.

1. That this stipulation was not repugnant to

ceipt of money belonging to the State; and if un-
2. That it was a contract to pay, and not a re-
defense to an action brought by the State to recover
the money.
constitutional, the objection could be set up as a

stipulation was set up as a defense, the state court
3. That, as the alleged unconstitutionality of the
against the exemption thus claimed, this court is
was bound to pass upon it; and having decided
authorized to review the decision.

[No. 27:]

Argued Apr. 1, 2, 5, 1875. Decided May 3, 1875.
IN ERROR to the Court of Appeals of the
IN
State of Maryland.

The case is fully stated by the court.

Messrs. Reverdy Johnson, Jno. H. B. Latrobe and Chas. J. M. Gwinn, for plaintiff in error:

By the decision of Chief Justice Taney in the "Passenger cases," in 7 How., and by that of the court in the case of "Crandall v. Nevada," in 6 Wall., 35, 18 L. ed. 745, it was adjudged that a citizen of the United States has a right to pass through, by the ordinary roads of travel, in the latter case, was of the opinion that the every State of the Union, without being liable Nevada Act was unconstitutional under the to state taxation. The minority of the court. commercial clause, but, although the majority placed their decision upon the grounds I have doubt that they are of opinion that it is. Cerjust stated, they did not hold that it was not also inhibited by that clause, and I have no

1. A stipulation in the charter of a railroad company that the company shall pay to the State a bonus, or a portion of its earnings, is not repug-tainly, this is the view entertained by Mr. Jusnant to the Constitution of the United States. with him in his dissenting opinion in the case of tice Miller and the two justices who concurred The Reading Railroad Company v. 15 Wall., 297, 21 L. ed. 169. Pennsylvania,

2. Such a stipulation is different in principle

from the imposition of a tax on the movement or

*Headnotes by Mr. Justice BRADLEY.

NOTE.-State control over railroads. State may, by statute, require railroad company to establish a station and build a station-house at a certain point on its line and stop at least two trains a day there. Com. v. Eastern R. Co., 103 Mass., 254, 4 Am. Rep., 555.

State Legislature has power to prohibit unjust discriminations in railway freights. Chicago & Alton R. Co. v. People, ex rel. Koerner. 67 Ill., 11, 16 Am. Rep., 599.

The right to build roads and levy tolls is an attribute of sovereignty, and, in the hands of a subject, a franchise. Where the Legislature confers a 678

franchise to build and operate a railway, it retains
the right to control the recipient in its exercise so
far as it does not surrender its authority to do so.
18 Am. Rep., 345..
Blake v. Winona & St. P. R. Co., 19 Minn. 418,

ulate the use of the franchise and limit the amount
of toll, unless they have deprived themselves of
The Legislature may also, from time to time, reg-
that power by a legislative contract with the own-
45, 22 Am. Rep., 679.
ers of the road. Beekman v. Sar. & S. R., 3 Paige,
A railroad is but an improved modern highway,
one which it is the duty and interest of the govern-

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